A recent study found that the global super-rich were pushing London’s ‘traditional elite’ out of areas such as Mayfair.
Photograph: Daniel Leal-Olivas/PA

The London mayor, Sadiq Khan, has asked the London School of Economics to carry out the UK’s most comprehensive inquiry into the impact of foreign investment on London’s housing market, amid growing fears about rising housing costs in the capital.

Khan on Thursday set out the scope of the inquiry, which will ask how many new homes are sold to buyers based overseas, how many are kept empty and how reliant developers are on foreign buyers. It is due to report back in spring.

Earlier this year, the Guardian revealed that a 50-storey block of 214 luxury apartments by the river Thames in Vauxhall was more than 60% owned by foreign buyers. A quarter of the flats were held by companies in secretive offshore tax havens and many were unoccupied.

Khan said: “London is open to people and investment from around the world. We welcome people from all countries who want to make the capital their home and we welcome international investment that can be crucial in kickstarting the building of new homes.

“At the same time, many Londoners have real concerns about new homes being left empty and the fact that this may be linked to those which are bought off-plan by overseas investors. I’m pleased that the LSE has agreed to lead on this important research, which is set to be the most thorough investigation of its kind in the country and will provide a much clearer understanding of this complex issue.”

The research will be overseen by Hugh Bullock, a member of the Homes For Londoners board, which brings together councils, transport experts and City Hall officials. Bullock, who has a long history of expertise with large-scale regeneration projects, will consult London boroughs, housing associations, developers and other housing industry professionals to review the research and make recommendations to the mayor.

A recent study by academics at London’s Goldsmiths Universityfound that the influx of cash into the capital’s luxury housing market from the global super-rich was having a wider impact on gentrification across the city.

It discovered that foreign investment at the top end had pushed London’s “traditional elite” residents from their wealthy enclaves in places such as Mayfair, Chelsea and Hampstead, and created a “trickle down” effect – raising prices beyond the reach of most people in previously cheaper London neighbourhoods.